Business & Tech News
US And China Escalate Trade War:
China has announced that it would impose its own retaliatory tariff rates on US products igniting a severe response from the Trump administration saying that it would impose a further 50% tariff on all Chinese imports. China has since vowed not to bow to the pressure. The new Chinese tariffs could see certain US companies bringing in goods from China facing a 104% tax rate. China’s Commerce Ministry said that any more tariffs from the US would trigger extra “countermeasures” targeting American goods. In a written statement it accused the Trump administration of blackmail and said that “if the US insists on this way, China will fight it to the end”.
By taking a counter position against the US trade tariff measures, China may be seeking to attract international political support and also additional trade volumes from new partners, which might make up for some of the loss of sales into America.
However with a massive $439 billion in exports to the US last year, it is extremely unlikely they will impact this loss in any great measure and China can hardly afford a trade war now, with the local economy at a low point and the central government having to provide a multitude of stimulus packages to try keep its economic growth positive. Analysts have indicated there could be major loss of jobs and an economic downturn as a result.
ABSA Group Results Positive:
South African Banking Major, Absa Group, released their 2024 Full year financial report this morning, indicating an increase of 10% in earnings, helped by a significantly improved result in the second half. Headline earnings increased 10% to R22.1 billion, with Dividend per share increased 7% to R14.60 per share. This improvement was driven by a more supportive operating environment and deliberate steps taken to support performance. Charles Russon, Interim Chief Executive Officer at Absa Group, highlighted the organization’s rally in the second half and its focus on generating value and earnings uplift. Key metrics indicate that Revenue increased 5% to R109.9 billion, with pre-provision profit increasing 5% to R51.4 billion. The bottom line was impacted by impairments decreasing 8% to R14.3 billion, with the credit loss ratio improving to 103 basis points from 118 basis points.
Nikkei Index Up With Possible Trade Deal on the Table:
Japan’s Nikkei 225 Index jumped 6% to around 33,000 while the broader Topix Index gained 3.5% to 2,370 in trade earlier today, shedding the losses seen on Monday after US President Donald Trump said that he agreed to meet with Japanese officials to begin trade negotiations following a phone call with Prime Minister Shigeru Ishiba. However, volatility is expected to remain high with uncertainty around the trade war with Beijing. However, Japan could benefit from a prolonged trade war with China and see the US increasing exports if a trade deal is finalised. Particularly in the Automotive and Tech sectors. Japanese financial stocks led the rebound after taking a pounding yesterday, with strong gains from Mitsubishi UFJ (11.8%), Sumitomo Mitsui (10.2%), and Mizuho Financial (13%). Automakers, consumer and technology stocks also jumped, including Toyota Motor (7.5%), Sony Group (7.4%), and Tokyo Electron (8.3%).
Kenya a Possible Trade War Beneficiary
The imports from the East African nation, which saw a total value of $737 million worth of trade goods, exported to the United States in 2024, Could well benefit from the Trump tariffs. Kenya is facing the minimum 10% tariff structure compared with 46% for Vietnam, 44% for Sri Lanka and 37% for Bangladesh, also large textile producing nations. The US imports massive volumes of textiles with little being produced locally currently. “With other textile-exporting countries facing much higher tariffs, Kenya could position itself as an alternative sourcing hub for buyers,” Trade Minister Lee Kinyanjui said last week. Economists said up-and-coming manufacturers in East Africa like Tanzania and Ethiopia could also benefit, as could Latin American countries like Brazil, which also received the baseline 10% tariff.
Samsung Q1 Profits Beat Analyst Expectations:
Samsung Electronics on Tuesday flagged a much smaller-than-feared 0.2% fall in first-quarter operating profit, boosted by solid memory chip sales and strong smartphone demand, partly driven by customers concerned about U.S. tariffs.
Sales of conventional memory chips used in consumer devices such as smartphones and AI chips likely came in better than expected, with some customers stockpiling chips ahead of potential U.S. tariffs on semiconductors, analysts said.
South African Rand at Two-Year Low:
The South African rand weakened further, dropping to around 19.47 per US Dollar, its lowest level since May 2023, as investors continued to ditch riskier assets amid the fallout from US trade policies and ongoing domestic political uncertainty. The US imposition of a 31% tariff on imports from South Africa is one of the highest levies in his overhaul of global trade. Meanwhile, diplomatic relations between the two countries have remained strained, especially after US officials called for sanctions on South Africa regarding local policies. The risk of a coalition government collapse grows, as tensions between the coalition’s two largest parties escalated following a recent dispute over the national budget tabled with increased government spending and further tax hikes.
Markets by Numbers
Currencies:
Currency markets are indicating the US Dollar trading lower and currently at 1.9774 against the Euro and trading lower against the Pound at 1.27871. The Yen is trading lower against the Dollar, and at 147.31 to the dollar currently. The rand has lost more ground today and is trading at a two-year low at R19.47 to the dollar currently.
Commodities:
- Gold futures prices have gained 1.1% this morning and currently at $3014 after seeing prices below $3000 yesterday.
- Copper prices have dropped by -14% in the past week but are gaining some upward momentum again as trade tariff talks resume and are at 4.3122 currently.
- Silver prices continue to gain this morning and are at 30.070 currently.
- Platinum is trading slightly higher today and at $906 currently, while Palladium prices are currently trading -9,5% lower for the week and at $888.50 currently.
- Brent Crude Oil prices are seeing some rebound in prices and at $64.87 currently, with WTI also trading upwards, and at $61.33 currently.
- Cocoa futures are currently trading lower, and at $7963 per ton.
- Coffee futures prices are trending downwards, and at $340.23 currently.
Crypto Currencies:
- Bitcoin prices remain low, and currently trading at $79437, down almost -7% in the last week.
- Ether prices have clawed back some losses, and currently trading at $1576.60
- $Trumpcoin is currently trading at $7.75 currently
(All prices quoted at approximately 08H50 – Central African Time)
